Tuesday 3 February 2009

Central bank tested as rouble hits floor

Russia’s rouble fell to a new low on Monday, hitting the floor announced by the central bank last month. Traders said this week could test how far the central bank was committed to stabilising it at the new level.

Finding an equilibrium level for the rouble may not be easy, as it depends on oil prices that are fluctuating, and on how quickly trade and capital outflows adjust to the new exchange rates.

The rouble has fallen roughly 33 per cent against the dollar since the end of the summer. On January 22 the central bank announced its ambition not to let it past about 36 to the dollar, or 41 to a basket of euros and dollars which is how the bank measures the rouble’s value. On Monday the rouble hit 46.29 versus the euro and 36.35 to the dollar.

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